Applied Materials will report earnings after the bell later today and after strong reports from Intel ,NVIDIA , and so many of the biggest names in tech, the pressure's on this company to come up with something good.
Guidance, as usual, will be important, and of course anything the company has to say about the solar power industry, where Applied has shifted a chunk of its business to handle new, and steady flow, of solar panel manufacturing orders. The Street this time around is looking for 29 cents a share on $2.38 billion in revenue.
But here's the thing: the company seems stuck even though you've got to give them credit for drumming up new business by appealing to solar panel manufacturers. Applied shares are on the move today, up another 2%, which might just be the effects of a general recovery in big name tech after the steep slide so many of these issues suffered over the past week. But Applied's slide began in October when shares were trading at nearly $22 a share. "On the move?" It's a 2% move. "Slide" since October? From $22 to today's $19 and change.
And that's the big problem with this company: there just hasn't been any significant catalyst to generate any meaningful excitement in these shares. The company's attachment to the solar/green/clean tech momentum was interesting. But even that seems to be waning. Shares have a 15x P/E, and targets for them hover between $23 and $24. Of course, the company's nascent solar business is also the wild card in its earnings.
Right now, it seems like Applied is sitting pretty, but also sitting still. We don't know who the company's top solar customers are, and maybe that'll come up on its conference call. First Solar?SunPower?JASolar?SunTech? Are any of these companies buying from Applied? And how much? Maybe we're underestimating just how big a deal solar could become for the company. Clarification on this could be interesting today.